Medicare Advantage organizations (MAOs) earned another small victory with a favorable ruling on a motion to dismiss out of Federal Court in Boston. The case, MSP Recovery Series, LLC v. Plymouth Rock Assurance Co., represents another in the continued slow march of decisions that afford Medicare Advantage Plans the right to sue primary payers in Federal Court for double damages. Judge Allison Burroughs’s decision adds Massachusetts to the list of states wherein MAOs have a green light to go after primary payers in Federal Court.
Attack on Primary Payers and Claimants
We have chronicled the march of the MAO plans for several years, most recently here. The basic issue in all of these cases is this: Are MAOs permitted to sue claimants and their counsel, providers, and most importantly, primary payers under the Medicare Secondary Payer statutes private cause of action provision? While some courts have taken the stance that MAOs are only permitted to sue primary payers, others have taken a more lax stance and have allowed claimant counsel to be sued. What is especially noteworthy is that since 2012 no court has concluded that MAOs do not have at least some rights under the private cause of action provision. At a minimum, it seems unlikely that any Federal Court judge or Judicial Circuit will stand to block the slow march of these decisions.
Insurer’s Motion Dismissed
The recent decision out of Massachusetts is similar to many District Court level cases. Judge Burroughs’s decision to dismiss the insurer’s motion to dismiss takes care to follow the In re Avandia decision – the Third Circuit ruling that paved the way for this wave of Federal Court litigation – and it carefully sets aside potential weaknesses in the complaint to be raised at a later date. The bar for MSP Recovery to clear in a motion to dismiss was relatively low, the court needed only to conclude that the complaint states a claim upon which relief can be granted. Here, the court sided with MSP Recovery and now a Federal District Court in Massachusetts as agreed with Avandia.
It is important to emphasize what this case is, and what it is not.
The original Avandia case involved a Third Circuit Court of Appeals ruling that overturned a District Court decision. There’s no telling what will happen next with this case or the First Circuit overall (and there’s no indication at this time that this motion to dismiss will be reviewed by the First Circuit). Parties in the other First Circuit states and indeed across the country should already be on notice of these types of claims so there is nothing extra special about this case for litigants in Rhode Island, Maine, New Hampshire or Puerto Rico.
Be Vigilant on Medicare Advantage Issues
All parties should be on the lookout for Medicare Advantage issues as they approach settlement. Medicare Advantage can be challenging for litigants, particularly because many beneficiaries are not familiar with their own coverage and how that may impact their personal injury claims.
ExamWorks Clinical Solutions offers a number or programs that can not only identify whether a Medicare Advantage Plan is involved in a claim, but also identify and mitigate risk in this area. If you need help with any aspect of Medicare conditional payments – including Medicare Advantage recovery – please contact our Director of Conditional Payment Research, Lou Porrazzo, at 678-256-5085 or firstname.lastname@example.org.